Daily Brief China: Shenzhen International, Lalatech Holdings Co Ltd, Hong Kong Hang Seng Index, Zhuzhou CRRC Times Electric Co., Ltd., Sino-Ocean Group, Porton Pharma Solutions, Mobvoi and more

• Shenzhen International (152 HK) seeks to spin off logistic assets on a PRC exchange; and  51.56%-held Shenzhen Expressway Co H (548 HK) intends to place out A shares.
• Preceding my comments on SZ Int’l/SZ E’Way are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• Lalatech Holdings Co Ltd (LALA HK), a leading logistics transaction platform, has filed for an HKEx IPO to raise US$1 billion, according to press reports.   
• Lalatech is the largest logistics transaction platform in the world by closed-loop freight gross transaction value in the first half of 2022, according to Frost & Sullivan. 
• The key elements of the bull case rest on solid growth, rising monetization rates, achieving maiden profitability, a shift to cash generation and a debt-free balance sheet.

• The Hong Kong Hang Seng Index (HSI) last week closed strongly up. This week it’s pulling back, but MRM pattern readings forecast a very short-lived pullback (-1 to -2 weeks).
• The suggested strategy is: let the index play out its pullback (warning: it can be volatile) and then enter LONG trades when the probability is good.
• Suggested support price areas are between 18965 (Q2) and 18732 (Q3) – or this Friday at Close (as long as the close is negative).

• The company has shifted its growth driver from rail equipment to EV parts supplier.
• Q1 23 growth came from emerging equipment coming to the rescue at a double digit rate when the train equipment segment recorded a slight decrease. 
• Compared to last year, the company is trading at a lower valuation, yet its key growth driver has a better and more sustainable quality. 

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Shui On Land
• Sino-Ocean Service

• Porton’s performance declined significantly in 23H1 compared with high base last year, because most of Pfizer’s COVID-19 big orders have been completed. Porton’s performance in 2023 would be under pressure.
• Porton isn’t a first-tier CXO and lags behind industry leaders in terms of new businesses (CGT/ADC CXO). Valuation of entire CXO sector and Porton hasn’t yet reached an inflection point.
• Market’s expectation for CXO would decrease and then bottom out in 2023H2. Whether CXO’s performance would rebound in 2024 still needs to wait for the turnaround in macro environment.

• Mobvoi (2185047D CH) is looking to raise about US$200m in its upcoming Hong Kong IPO. 
• Mobvoi is an AI company focusing on generative AI and voice interaction technologies. As per CIC, the firm is the largest revenue-generating AI company focusing on AI-generated content in 2022.
• Mobvoi’s revenue growth was primarily driven by its AI enterprise solutions segment, which led to gross margin expansion and profitability turning positive on all fronts in FY22.